PSA and Renault repaying a third of the 6 billion euros loan

Renault and PSA/Peugeot-Citroen are prepared to repay about a third of the 6 billion euros ($7.6 billion) in loans received from the French government loans to assist them in getting by during the financial crisis. In April last year, France gave loans of 3 billion euros each to PSA and Renault so that they will be able to survive.

These two companies are vital since they support hundreds of thousands of jobs in France. The loans were due to be paid back from next year.

These two companies have stated that they will repay 1 billion euros this Friday. PSA said that the reimbursement will come from current liquidity resources, enabling the group to cut gross debt and to get considerable interest expense savings. In a separate statement,

Renault said that the repayment will help it reduce gross debt and lower interest expenses. Last June, both companies said that they will repay a portion of the loans early as the carmakers have been able to recover due to the scrapping schemes.

Back then, Renault said that it hopes to repay at least 500 million euros this year. Meanwhile, PSA stated that it could repay 1 billion in the second half. [via autoenws - sub. required]